News in Review 

UK economic growth has been revised upwards by the International Monetary Fund – 1.2% in 2025 and 1.4% in 2026  The government plans to double £25bn+ pension megafunds to improve retirements and boost UK investment Retail confidence plunges to a five-year low, with sales falling and businesses bracing for tougher conditions 

‘An economic recovery is underway’ 

The UK economy is expected to grow faster than previously thought next year, according to the International Monetary Fund (IMF), but the government faces growing pressure to balance its books. 

In its latest review, IMF forecasts UK growth of 1.2% in 2025, up from April’s 1.1% projection, and 1.4% in 2026, saying ‘an economic recovery is underway.’ The upward revision follows a stronger-than-expected start to the year, helped by rising consumer spending and business investment. Luc Eyraud, IMF’s UK Mission Chief, described growth in the first quarter as “very strong,” though he noted the figures pre-date the impact of new import tariffs and higher employer taxes introduced in April. 

The review welcomed recent planning and infrastructure investment reforms, saying they could lift long-term growth if fully delivered. However, IMF cautioned that global instability and tight fiscal conditions would test the Chancellor’s commitment to her tax and spending rules. It recommended cutting the number of annual fiscal assessments by the Office for Budget Responsibility from two to one, to reduce pressure on short-term decision-making. 

Despite growing fiscal challenges, the government insists its two core rules – covering everyday spending from tax revenues and reducing debt as a share of GDP by 2030 – remain non-negotiable. Although global trade tensions are expected to weigh on growth, IMF acknowledged the government’s efforts to provide stability through trade deals with the EU, US and India. 

On Monday, the government accepted all 62 recommendations from the long-awaited Strategic Defence Review (SDR), including building 12 new nuclear-powered submarines, six new munitions factories and embracing AI. 

Government to double pension megafunds by 2030 

The government has confirmed plans to double the number of UK pension ‘megafunds’ by 2030, a move which it says will help millions of workers retire with larger pension pots. Megafunds are defined as multi-employer defined contribution schemes or Local Government Pension Schemes managing at least £25bn in assets. 

New rules will require all such schemes to operate at megafund scale by the end of the decade. The government says this shift will unlock greater investment opportunities, such as infrastructure and private equity, leading to stronger long-term returns for savers. 

Chancellor Rachel Reeves said, “We’re making pensions work for Britain. These reforms mean better returns for workers and billions more invested in clean energy and high-growth businesses — the Plan for Change in action.” 

Reforms will be delivered through the upcoming Pension Schemes Bill. The legislation will also introduce clearer value-for-money measures and allow schemes to move savers into higher-performing funds, with protections in place. Funds that already exceed £10bn in assets will be allowed to remain if they present a credible plan to hit the £25bn threshold by 2035. 

The shift builds on a recent pledge by pension funds to invest more in UK assets, supported by new local investment targets for LGPS authorities. In total, £50bn has already been committed. According to the government, reforms could also reduce system inefficiencies, saving £1bn annually and potentially adding £6,000 to the average saver’s pension pot. 

Retail confidence hits five-year low as sales slide 

Retailers are expecting tougher times ahead, according to the Confederation of British Industry (CBI), after the UK retail sector fell sharply in May. Its latest quarterly survey shows confidence among retailers dropping to its lowest level since May 2020, with a net balance of -29% expecting business conditions to deteriorate over the next three months. 

Sales volumes also declined more steeply, with the CBI’s monthly gauge falling to -27 in May, down from -8 in April. Looking ahead, expectations for June are even weaker, with a reading of -37, the lowest since February 2024. 

The findings point to a growing divide between headline economic data and the day-to-day experience of many high street businesses, as consumer demand remains patchy and cost pressures persist. 

“This was a fairly downbeat survey and highlights some of the challenges facing the retail and wider distribution sector,” said Ben Jones, Lead Economist at the CBI. “In contrast to other recent retail data, this survey suggests parts of the sector are still struggling with fragile consumer demand, though online sales seem to be holding up better.” 

The pessimism comes despite recent official figures showing a surprisingly strong rise in sales in April.  

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

             All details are correct at time of writing (4 June 2025) 

Economic Review May 2025

GDP unexpectedly rose by 0.7% in Q1 2025, driven by services, production and investment growth The Bank of England cut interest rates despite inflation jumping to a 15-month high at 3.5% The UK labour market shows weakness as payrolls drop and unemployment edges up to 4.5%

UK growth beats expectations 

First quarter gross domestic product (GDP) data published last month by the Office for National Statistics (ONS) showed the UK economy grew more strongly than had been predicted during the first three months of 2025. 

According to the latest GDP statistics, economic output rose by 0.7% between January and March, up sharply from a rate of 0.1% in the final three months of 2024. This figure was also higher than economists had been expecting, with the consensus forecast from a Reuters poll pointing to a quarterly growth rate of 0.6%. 

ONS said the economy’s strong first quarter performance was largely driven by the services sector, which includes businesses in areas such as retail, hospitality and finance. The production sector, however, also saw significant growth as firms brought activity forward in order to beat the imposition of US tariffs, while business investment grew strongly too, recording its largest quarterly growth rate for two years.  

Updated growth forecasts released towards the end of last month by the International Monetary Fund (IMF) were nudged higher in order to reflect the strong first quarter data. The international soothsayer now predicts the UK economy will expand by 1.2% across the whole of 2025, with growth expected to hit 1.4% next year, in spite of headwinds from US tariffs which are expected to reduce annual output by 0.3%. 

Despite the upgrade, the IMF forecast still assumes the strong performance seen early this year will prove short-lived. Survey evidence also points to a sharp second quarter slowdown, with data from the S&P Global UK Purchasing Managers’ Index hinting at a possible second quarter contraction. While last month’s flash Composite Output figure was up on the previous month’s level ‒ suggesting an easing of the downturn in May ‒ it did still remain below the 50.0 threshold that denotes contraction in business activity. 

Interest rates down; inflation up 

Last month saw the Bank of England (BoE) sanction a further cut in interest rates while data released a couple of weeks after that decision showed the headline rate of inflation now standing at a 15-month high.  

Following its latest meeting, which concluded on 7 May, the BoE’s nine-member Monetary Policy Committee (MPC) voted by a 5-4 majority to reduce rates by 0.25 percentage points, taking Bank Rate down to 4.25%. Unexpectedly though, there was a three-way split among policymakers: while two of the four dissenting voices actually voted for a larger half-point reduction, the other two dissenters preferred to leave rates unchanged. 

Analysts had not expected any votes to be cast against a rate cut and the fact that two MPC members did, sent a more hawkish message in relation to the speed of any future monetary policy easing. A recent Reuters poll, however, did find that most economists still expect two more cuts this year, with the consensus viewing August as the most likely date for the next reduction.  

Commenting after announcing the MPC’s decision, BoE Governor Andrew Bailey also reaffirmed his expectation that rates will continue on a downward trajectory. While Mr Bailey stressed that he was not prepared to “give predictions as to when and how much,” he did state that he was “still of the view that the path, gradually and carefully, is downwards.” 

The latest official inflation statistics released two weeks after the MPC meeting, though, showed that the annual headline CPI rate jumped to 3.5% in April from 2.6% in March. This figure was above market expectations and represents the highest reading since January 2024. It also clearly leaves inflation significantly above the BoE’s 2% target, and led some economists to suggest that any future rate cuts may need to be more gradual.     

Markets  

At the end of May, the FTSE 100 rose while US and Asian stocks fell as investors digested new tariff uncertainty. As the month drew to a close, President Trump accused China of breaking their tariff truce, he was also defending potential roadblocks to his trade policies from the US courts. 

In the UK, the FTSE 100 index closed the month on 8,772.38, a gain of 3.66%. The mid-cap focused FTSE 250 closed May up 6.04% on 21,028.01, while the FTSE AIM closed on 746.68, a monthly gain of 8.23%. 

The Dow Jones closed May up 3.94% on 42,270.07, while the tech-orientated NASDAQ closed the month up 9.56% on 19,113.77. May marked the best month for the NASDAQ since November 2023. 

On the continent, the Euro Stoxx 50 closed May 4.07% higher on 5,366.59. In Japan, the Nikkei 225 ended the month on 37,965.10, a monthly gain of 5.33%.  

On the foreign exchanges, the euro closed the month at €1.18 against sterling. The US dollar closed at $1.34 against sterling and at $1.13 against the euro.  

Brent Crude closed May trading at around $60 a barrel, a monthly loss of just over 1.00%. The oil price fell at month end pressured by uncertainty over US trade policy developments and expectations of increased supply from OPEC+. Gold closed the month trading around $3,291 a troy ounce, a monthly loss of 0.77%. The price edged lower at month end as traders positioned themselves ahead of the release of US inflation data. 

Retail sales growth remains strong 

The latest official retail sales statistics showed sales volumes grew strongly in April, while more recent survey evidence points to a pick-up in optimism among the consumer base.  

ONS data released last month revealed that retail sales volumes grew by 1.2% in April; this figure was significantly above analysts’ expectations and marked a fourth successive monthly increase in sales volumes. ONS noted that April’s warm weather provided a boost to sales across most sectors with supermarkets, butchers, bakers, alcohol and tobacco stores all enjoying a particularly positive month. 

Data from GfK’s most recent consumer confidence survey also offered some cheer to the retail sector, reporting an improvement in consumer morale. Driven by improved optimism in households’ outlook for both their own finances as well as wider economic prospects, May’s headline figure rose to -20 from a figure of -23 the previous month. 

Last month’s CBI Distributive Trades Survey, however, did report a sharp decline in confidence among retailers with its gauge of business sentiment dropping to its lowest level since May 2020. CBI Lead Economist Ben Jones described May’s results as “fairly downbeat” adding that some parts of the retail sector were continuing to struggle with “fragile consumer demand.”  

More signs of a weakening jobs market 

Labour market data released last month revealed further signs of cooling in the UK jobs market, with the number of workers on payrolls and vacancies both declining and the unemployment rate ticking higher. 

Provisional tax office statistics published by ONS showed that the number of employees on companies’ payrolls fell by an estimated 33,000 in April following a 47,000 drop in March. The overall level of job vacancies also fell once again, with 42,000 fewer reported in the February to April period; this represents the largest decline in over a year. 

The data also revealed an increase in the unemployment rate, which rose to 4.5% in the three months to March; this compares to 4.4% during the previous three-month period. ONS did, however, warn that its unemployment figures still need to be treated with some caution due to increased data volatility stemming from low survey response rates. 

A Chartered Institute of Personnel and Development survey released last month also reinforced the picture of a cooling jobs market; the survey’s headline gauge of employment intentions fell to a record low outside of the pandemic, as rising employment costs and uncertainty in the global economy forced many organisations to scale back recruitment. 

All details are correct at the time of writing (02 June 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

Wealth – In the news

Research highlights key differences in wealth transfer preferences and family financial priorities between men and women Top financial priorities for 2025 include enjoying life (34%), building emergency savings (30%) and pension saving (11%) AI now accounts for 42.5% of financial fraud attempts, with cases rising 80% over the past three years 

Women put children first in succession planning 

Research1 shows that women prioritise their children in succession planning, while men are more likely to focus on their spouse. Among high-net-worth women, 45% prioritise their children, compared to 33% of men. Meanwhile, 37% of men prioritise their spouse, whereas only 17% of women do, highlighting key differences in wealth transfer preferences and family financial priorities. 

Personal finance positivity on the up 

New research2 reveals that 60% of UK adults feel positive about their finances this year, up from 52% in 2024. Top financial priorities for 2025 include enjoying life (34%), building emergency savings (30%) and pension saving (11%). Despite economic challenges and high inflation, pension-saving attitudes remain steady. Unexpected expenses remain the biggest financial concern (35%). These findings suggest that while financial confidence is growing, many people are focused on balancing short-term enjoyment with long-term security. 

AI financial fraud hits 42% 

A recent report3 reveals that artificial intelligence (AI) now accounts for 42.5% of financial fraud attempts, with cases rising 80% over the past three years. AI has made fraud easier to carry out, but external factors also contribute to the surge. Meanwhile, banks and financial institutions are leveraging machine learning to detect and prevent fraud, continuously improving their ability to combat evolving threats in an increasingly digital landscape. 

1Charles Stanley, 2025, 2Aegon, 2025, 3Signicat, 2024 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.

Equity Release – cause for optimism

Over 15,000 active customers and £622m in lending recorded in Q4 2024, up from £525m in Q4 2023 A 3.3% increase in UK house prices contributed to larger loan sizes and improved product availability.  A 27% rise in returning customers using further advances shows growing confidence in equity release 

Looking at The Equity Release Council’s (ERC) recent data1 for Q4 2024, it highlights that there were over 15,000 active customers in the market during the period, the highest recorded since Q3 2023. 

With customers, either agreeing new plans, taking drawdowns from existing plans or agreeing further advances (extensions) to existing plans, total lending in Q4 2024 reached £622m, a significant rise from the £525m recorded in Q4 the previous year. 

The report highlights a 3.3% rise in UK house prices, which contributed to larger loan sizes for both drawdowns and lump sum mortgages. It also notes that product availability has improved over the last year. The market also saw a rise in returning customers using further advances, with a 27% increase in Q4, which, according to ERC Chair, David Burrowes, reflects “the confidence that homeowners have in leveraging their property wealth responsibly.” 

Confidence returns 

Marking a third consecutive quarter of growth, signalling returning consumer confidence, Burrowes commented, “The equity release market has turned a corner and there is cause for optimism. Interest rates have started to settle and if the growth seen in 2024 continues to gain momentum, 2025 will see more customers considering the option to access their housing equity using an increasingly diverse range of innovative products.” 

Speaking of customers making use of reserve facilities to manage borrowing efficiently over time, Burrowes said this demonstrates “the versatility of equity release in addressing diverse financial goals, from home improvements to supplementing retirement income.” 

1ERC, 2025 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home. Equity released from your home will be secured against it. 

News in Review

The CPI rate of inflation rose to 3.5% in April—above forecasts—driven by energy, services and air fares The £20,000 ISA limit is to remain but changes to the cash ISA component are under review The government is expected to expand eligibility for winter fuel payments in the Autumn Budget 

“April’s rise in inflation was widely expected” 

The latest inflation data from the Office for National Statistics (ONS) shows the Consumer Prices Index (CPI) rose by 3.5% in the 12 months to April 2025, a sharp increase from the 2.6% reading in the 12 months to March. This uptick was higher than expectations, with a Reuters poll of economists predicting 3.3% and the Bank of England (BoE) 3.4%. It marks the highest rate in over a year. 

During the month (April), CPI rose by 1.2%, compared with a rise of 0.3% the previous April. The pickup in the rate can be attributed to increases in household bills, with electricity, water and gas prices increasing on 1 April. Service price inflation also leapt 5.4% in the 12 months to April, outpacing expectations of between 4.8-5.0%. In April, service prices elevated 2.2%, representing the largest increase in 34 years. 

Air fares also contributed to the increase. ONS noted that the timing of the Easter holiday, which fell in April this year, likely contributed to the sharp rise in fares – up 27.5% from March – marking the second-largest monthly increase for April ever recorded. 

The BoE expects inflation to peak at 3.7% between July and September. 

Principal Economist at the CBI Martin Sartorius said, “April’s rise in inflation was widely expected, driven by a perfect storm of price pressures such as higher employer National Insurance contributions, the National Living Wage increase, and a hike in the Ofgem price cap. Looking ahead, the Bank of England expects that inflation will stay above 3% this year, as these pressures continue to impact household’s cost of living. This suggests that the Monetary Policy Committee is likely to hold rates in its next meeting, especially after May’s finely balanced decision to cut. Beyond then, the MPC will reduce borrowing costs at a gradual pace, as it assesses how price pressures are developing in the economy.” 

ISA allowance to be preserved 

Last week, Rachel Reeves confirmed the £20,000 annual limit on ISAs (Individual Savings Accounts) will not be reduced, as widely speculated. However, she did not directly rule out the idea of cutting the cash ISA allowance while retaining the overall limit. 

Some have speculated that the cash allowance could be cut to encourage people to invest instead and kickstart economic growth, one of the government’s primary objectives. The Chancellor commented, “I’m not going to reduce the limit of what people can put into an ISA, but I do want people to get better returns on their savings, whether that’s in a pension or in their day-to-day savings.” 

She continued, “At the moment, a lot of money is put into cash or bonds when it could be invested in equities, in stock markets, and earn a better return for people. But I absolutely want to preserve that £20,000 tax-free investment that people can make every year.” 

The Chancellor is expected to announce a consultation seeking views from across the City of London on potential reforms to the ISA market. The upcoming Mansion House speech in July is widely anticipated as the platform for launching the consultation. 

Winter fuel payment U-turn 

At the start of Prime Minister’s questions last week, Keir Starmer announced a U-turn on the winter fuel payment for pensioners. He said that more pensioners will be eligible for payments, adding that the government will make decisions based on affordability. Last year, the government made the benefit means-tested, which eliminated over nine million people from the payment (of up to £300). After the changes, only pensioners with annual incomes below £11,500 were eligible for the payment. The revised eligibility criteria are expected to be outlined in the Autumn Budget. Downing Street has not confirmed when the changes will be implemented.  

A spokesperson for the End Fuel Poverty Coalition commented, “Any U-turn is welcome, but what matters now is the detail, especially if Winter Fuel Payments are not restored to all pensioners. Any dilution of the proposals will mean fewer older people can be helped to reduce their energy use in a safe way. Pensioner fuel poverty is often hidden away behind closed doors and ultimately pensioners need warm, energy-efficient homes, not more sticking plasters.” 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (28 May 2025) 

Residential Property Review – May 2025

Knight Frank raises its UK house price growth forecast to 3.5% for 2025 amid rate cut optimism March saw a surge in transactions as buyers rushed to beat the Stamp Duty changes Buy-to-let investors increasingly target northern regions for affordability and rental yield advantages 

Improving rate outlook boosts UK forecasts 

Knight Frank has raised its house price forecasts amid signs of a more supportive interest rate environment.  
 
The revision follows the Bank of England’s recent rate cut to 4.25% and growing expectations of further reductions this year. Even if those cuts don’t materialise, Knight Frank says cheaper fixed-rate mortgages will underpin demand in the months ahead. The estate agent expects UK residential property prices to rise 3.5% in 2025, up from a previous estimate of 2.5%, with five-year growth projected at 22.8%. Greater London’s outlook has also been upgraded, reflecting stronger prospects as mortgage rates edge down. 

However, forecasts for prime Central London were downgraded, with prices expected to remain flat this year due to political uncertainty and the government’s decision to scrap the non-dom regime. While Central London prices fell 1.6% over the past year, outer London saw a 1.2% rise. Rental forecasts remain broadly unchanged. 

Stamp Duty deadline boosts March sales  

March saw the fifth highest number of transactions in any month of the last decade, according to Savill’s latest UK Market Update.  

UK housing market activity surged in March ahead of Stamp Duty changes, with HMRC recording over 164,000 transactions, 66% above the pre-pandemic average. However, demand has since cooled.  According to Nationwide, annual growth in house prices is expected to slow to 3.4%. The slowdown reflects a more cautious mood among buyers. A recent survey found 37% of buyers expect mortgage rates to rise, compared to just 16% anticipating a fall. 

Despite this, mortgage rates have dropped for many borrowers, with sub-4% deals returning for low loan-to-value purchases. The Bank of England’s latest rate cut has given lenders room to compete, while softened stress testing rules may boost borrowing power. Still, limited housing supply may keep prices elevated.  

Buy-to-let investors look north as cost pressures reshape the market 

Buy-to-let investors are currently favouring the midlands and north of England, as mortgage and Stamp Duty costs make the south less attractive.  

Hamptons research shows a record 39% of buy-to-let purchases took place in these regions from January to April 2025, up from 34% in 2022 and 24% in 2007. This comes despite a broader slowdown in landlord activity, with investors accounting for only 10% of home purchases nationwide so far this year. 

The north benefits from lower property prices and stronger rental yields. The average landlord with property in the midlands and north spent £150,480 on an investment property, saving nearly £142,000 compared with average purchases in the south. In North-East England, new buy-to-lets are delivering 9.3% gross yields, well above the national average of 7.1%. If current trends continue, most buy-to-let activity could shift north by 2033. However, this may hit tax receipts and worsen rental shortages in pricier southern regions. 

Limited company structures dominate landlord ownership  

The share of landlord-owned properties held in limited companies has reached 66%, up from just 36% in 2020, according from Pegasus Insight research for Foundation Home Loans.  

Among those landlords planning to buy in the next year, 60% intend to use a limited company. Landlords using corporate structures own an average of 14.6 properties, compared with 5.2 for those holding property personally. Diversification is also on the rise, with one in five landlords owning a property with multiple occupiers and 6% holding a holiday let. Larger landlords are far more likely to invest in these specialist types of property. 

Despite rising costs, 84% of landlords remain profitable and rental yields remain strong. Remortgage activity is expected to stay high, with many favouring fixed-rate deals for added stability. Regulatory reform, particularly around possession and energy efficiency, remains the sector’s top concern. 

All details are correct at the time of writing (21 May 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

Commercial Property Market Review – May 2025

Q1 2025 West End investments hit £1.71bn, driven by three major transactions despite fewer deals UK commercial property demand is rebounding, with offices and industrials gaining, while retail lags behind The Big Six cities, especially Manchester and Leeds, show strong office market recovery and occupier demand

West End investment rebounds  

London’s West End commercial property market saw a robust start to 2025, with Savills reporting £1.71bn in investment volumes across 24 transactions in Q1.  
 
Three large deals dominated, accounting for over £1.1bn. March saw nearly half the total, boosted by Norges Bank Investment Management’s £570m acquisition of a 25% stake in Shaftesbury Capital’s Covent Garden portfolio. Despite transaction numbers still falling short of long-term averages, Q1 turnover was 15% above the ten-year average and 40% above the five-year. 

Other significant March deals included GPE’s £56m purchase of One Chapel Place, JD.com’s acquisition of 20 Greycoat Place and a rapid private sale of 17 Albemarle Street for £15.1m. Domestic investors were the most active buyers, while UK sellers led disposals. Savills notes rising demand in areas with improving rents. Prime West End yields fell to 3.75%, suggesting a gradual recovery despite ongoing economic uncertainty, according to Savills. 

Signs of recovery in UK commercial property  

UK commercial property is showing early signs of recovery, according to the latest Royal Institution of Chartered Surveyors’ (RICS) survey, although broader sentiment remains cautious.  

Modest gains in office and industrial demand helped push overall occupier demand into marginally positive territory in Q1 2025, although retail continues to underperform. Prime offices and industrial spaces should see rental and capital value growth this year, while weaker outlooks persist for secondary retail and office stock. Data centres, multifamily housing and life sciences assets are expected to outperform. 

However, rising National Insurance costs are adding pressure on occupiers and uncertainty from US tariffs has weighed on market confidence. Central London is forecast to lead on prime office rents, while Scotland and Northern Ireland could see the strongest gains in prime industrial. RICS cautions that while sentiment is improving in places, domestic and international policy challenges make the longer-term outlook uncertain. 

Big Six regional office markets buoyed by strong demand 

Investor confidence in UK regional office markets remains high, with strong demand focused on city centre assets in the Big Six cities.  

According to Colliers’ Regional Offices Snapshot, occupier appetite and rental growth are driving activity, with business parks and older stock being targeted for redevelopment. Manchester led the way, accounting for 35% of Big Six take-up over the past year. Transactions totalled nearly 320,000 sq. ft in the first quarter, 14% above the ten-year average. City centre availability has declined for five consecutive quarters, with Grade A vacancy falling to 2.2%. 

Leeds started the year strongly, with deal volumes up 53% on Q4 2024. Although Grade A take-up was slightly below average, key lettings at Aire Park supported strong absorption. Encouragingly, demand from financial, tech and media sectors rebounded. Bristol had a slower Q1, with city centre take-up 27% below last year and 40% below the five-year Q1 average. 

Occupier demand surges in Scottish commercial property market 

Scottish commercial property demand is rising at its fastest pace in three years, according to the latest RICS Commercial Property Monitor.  
 
In Q1 2025, 21% of surveyors reported an increase in demand, up from 10% at the end of 2024. Growth was recorded across offices, industrial sites and retail units. Industrial space led the way, with 37% of respondents reporting stronger occupier demand. Offices and retail space also rose, continuing last year’s trend. Over the next 12 months, 42% of surveyors expect rents to increase across all sectors, with the industrial sector singled out for likely rental growth. 

Enquiries for office and industrial space has improved significantly, though retail remained flat. Capital value expectations are up for offices and industrials, but still falling in retail. Longer-term, surveyors remain upbeat despite concerns around build costs, inflation and development constraints voiced by professionals in Glasgow and Edinburgh. 

All details are correct at the time of writing (21 May 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

News in Review

The UK economy grew 0.7% in Q1 2025, exceeding forecasts and signalling potential recovery momentum A new UK-EU deal includes border easing, a youth mobility scheme and renewed defence cooperation The FCA reveals 13 million have low financial resilience, with widespread savings shortfalls and mental stress 

“The economy is beginning to turn a corner” 

The latest data from the Office for National Statistics (ONS) shows the UK economy grew faster than expected in Q1, recording a 0.7% uptick in GDP. A Reuters poll of economists had predicted growth of 0.6% in the quarter, aligned with Bank of England estimates. This growth marks a sharp increase from the 0.1% recorded in Q4 2024. 

Increases in consumer spending and production supported growth in Q1, with the services sector also dominating. Business investment also saw strong growth, expanding by 5.9% from Q4, the largest increase in two years. On a monthly basis, the ONS data shows the economy grew by 0.2% in March, outperforming analysts’ expectations of zero growth.  

Rachel Reeves reacted to the data, saying the growth was “very encouraging” before adding, “we still have to do more. I absolutely understand that the cost of living crisis is still real for many families, but the numbers today do show that the economy is beginning to turn a corner.” 

The latest data captures growth just before US tariff announcements and employer National Insurance increases, with analysts cautioning the strong growth rate is unlikely to continue. 

Economics Director at the Institute of Chartered Accountants in England and Wales (ICAEW), Suren Thiru believes the Q1 pick up in growth is likely to prove short-lived as businesses rushed to satisfy orders prior to US tariffs, commenting, “This robust quarterly reading is probably the pinnacle for economic growth this year, with activity likely to slow sharply going forward as tax and tariff rises and global uncertainty bite.” 

New UK/EU deal struck 

This week, Keir Stamer hosted a summit with senior leaders from the bloc, including Ursula von der Leyen, European Commission President, where he signed a deal with the EU, in a bid to reset relations.  

Key elements of the deal include a 12-year agreement on EU fishing boats accessing UK waters, a reduction in checks on food exports to the EU, UK travellers to Europe will be permitted to use e-gates at borders, a new defence and security pact, and a youth mobility scheme allowing young people from the EU and UK the right to live and work in each other’s countries for a limited period. 

The Prime Minister said, “It’s time to look forward… to find common sense practical solutions which get the best for the British people. We’re ready to work with partners if it means we can improve people’s lives here at home.” 

“Finances are stretched for many” 

The latest Financial Lives survey from the Financial Conduct Authority (FCA) has highlighted that a quarter of the population (13 million people) have low financial resilience, meaning they have low savings, are missing a series of bill payments and are struggling with debt. Alarmingly, 10% have no cash savings, while another 21% have under £1,000 in savings. The findings, released on Friday, underscore the financial vulnerability of millions and the far-reaching impact on their mental health – with almost 12 million people feeling stressed or overwhelmed handling financial matters. 

Executive Director of Consumers and Competition at the FCA, Sarah Pritchard commented, “Our data shows that finances are stretched for many – with some unable to save for a rainy day. And we know that some do not have the confidence to invest… but there are improvements – more people with current accounts and less digital exclusion.” 

As part of a new strategy, the FCA is working to improve people’s access to help, guidance and advice so that everyone can access the support they need, at an affordable price, enabling them to make informed financial decisions. 

Other key findings from the bi-annual survey include: 

  • The median amount people hold in savings is £5,000 to £6,000 
  • A fifth of people hold savings of at least £25,000, with 10% holding savings exceeding £50,000 
  • Just over 60% of people who hold over £10,000 in investible assets such as money in savings accounts and cash ISAs, are holding at least three quarters of these assets in cash as opposed to investments 
  • 3.8 million retirees are concerned they don’t have enough money to last throughout their retirement. 

The FCA wants to see more people holding mainstream investments, in order to improve long-term returns. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (21 May 2025) 

Navigating uncertainty together 

Economic and political uncertainty can lead to impulsive financial decisions—long-term planning is key Media headlines create noise, but financial plans should be tailored to personal goals, not speculation. A strong financial strategy is built to adapt—seek expert advice to stay on track 

Over the past five years, we’ve experienced a global pandemic, geopolitical conflicts, political upheaval and economic uncertainty. Constant media coverage over what feel like daily developments, whether that be on the international stage as Donald Trump’s second term impacts or on home shores, where the government’s changes to policy and taxation naturally result in feelings of uncertainty. This can lead many to make knee-jerk financial decisions without fully understanding the consequences. 

Now, more than ever, it’s essential to take a step back and take advice before making any financial moves. Headlines create noise, but your financial plan should be tailored to your specific circumstances – not dictated by market noise or speculation. Investing is about the long term – not reacting to daily events. 

We work hard to build a well-structured, long-term strategy. Take comfort from the fact that a solid plan can flex as different challenges present. You don’t need to navigate this alone – stay disciplined and take advice to ensure your financial future remains on track. We’re here to support and guide you. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

Surging demand for protection insurance – are you covered?

Income protection demand is expected to grow, with 51% of financial advisers predicting an increase in 2025 44% of advisers anticipate rising demand for life insurance, as more people seek financial security  With economic uncertainty, more individuals are prioritising private health insurance and income protection 

The demand for health insurance, income protection and life insurance is expected to rise significantly in 2025, according to a recent survey1. The study, which gathered insights from 250 UK financial advisers, highlights a growing awareness amongst clients of the need for comprehensive protection cover. 

Income protection is set to see the most substantial growth, with 51% of advisers predicting increased demand, while 31% expect it to remain steady and only 18% foresee a decline. Similarly, life insurance demand is anticipated to rise, with 44% of advisers forecasting growth, 37% expecting no change and 19% predicting a drop. Private health insurance also follows this trend, with 40% of advisers anticipating an increase, 32% expecting stability, and 28% forecasting a decline. 

A busy year 

These figures, as well as our own experience of what clients are asking about, indicate that this year is shaping up to be a busy one for protection insurance, as more people recognise the importance of safeguarding their financial future. With economic uncertainties and evolving healthcare needs, individuals and families are increasingly looking for ways to secure their income and wellbeing. 

If you’re considering protection insurance or want to review your existing cover to make sure it meets your current needs, now is the time to explore your options. We’re here to help with all your protection needs – get in touch to find the right cover for you and your family. 

1The Exeter, 2025 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.